information scarcity
Issue 117 - January 6th, 2023
Gatekeepers of information are powerful. Real estate agents’ power used to be their access to information that others did not have in the world. Pre-internet and pre-sites like Zillow, consumers had to contact agents in their local market to even know what was for sale in the area. The agents wielded all of the power.
Legacy real estate brokerages with commissions split business models built their entire business model architecture around this fact. Most have not evolved much since then and are still trying to hang on to the old ways.
As Seth Godin mentions in this blog post below: “information scarcity is disappearing”.
If you as a real estate agent still think your value is purely being a gatekeeper to market information then you are on the wrong path. Agents have to evolve into something else; the value is in being a true resource and expert for your clients to navigate the crazy path of buying or selling a home.
I always say that the real work begins far before someone contacts you about selling their home and on the buying side a lot of the value is shown when the contract is executed and the time between execution and close. Your clients know as much about the market as you do so stop telling yourself the value is in market information. Your value is in helping them understand information that all have and being an expert to guide them through all the pitfalls and traps that can appear along the way. Your duty is to help your clients have the best outcome for their desired intention in selling or buying a home and being there with them the whole way from start to finish.
Seth Godin’s blog called “The travel agent’s problem” is a big source of inspiration for me over the last few years. The full text is copied here:
Not just travel agents, but all agents.
Information scarcity is disappearing.
Forty years ago, passengers didn’t know which airline flew where and when. And forty years ago, airlines had no easy way to find out who wanted to fly somewhere. Today, of course, there’s no shortage of information or ability to connect. So paying 10% of their revenue to a human who will use a terminal instead of the passenger using a computer hardly makes sense for the airline.
Movie studios used to have to wrestle with information scarcity, and so did talented creators. Actors weren’t sure who was making what, and studios had imperfect information about who to cast. Today, IMDB (and proprietary tools) surface enormous amounts of information for the studios. They know who is working on what, who is a pain in the neck, who can add to the effectiveness of the project. And the creators are part of networks, formal and informal, that get them information faster and more efficiently than a single human often could.
The same thing is happening to car dealers. In fact, just about any job where you used to hoard information and charge a fee is now in danger.
When your clients know more than you do, it’s difficult to be an old-fashioned agent who is making money based on information scarcity.
The alternative is to become a network hub who creates value through information abundance.
Real estate agents must evolve into a Superhero for their clients. The gatekeeper of information is no longer relevant in today’s world.
I have held these thoughts for a few years now, but as the industry and world continues to move forward, I have more and more conviction in my thoughts and ideas for the future.
Check out a post I wrote over 2 years ago and have updated a few times since then but as we embark on a new year, I think it is worth sharing again for my first post of 2023!
Gatekeeper——>Superhero
Newsworthy Links To Share
5 Proptech Innovations (including Pinnacle Realty Advisors) That Rocked The Real Estate World in 2022 (Candy’s Dirt)
PODCAST: Pinnacle Realty Advisors’ CEO on brokerage as a service business model: This episode features Sam Sawyer of Pinnacle Realty Advisor to discuss the reinventing of the brokerage relationship with the agent. (Real Trends)
eXp’s Glenn Sanford assumes new leadership role: Glenn Sanford, founder and CEO of eXp World Holdings, will step in as CEO at eXp Realty, the cloud-based brokerage. (Real Estate News)
Compass launches third round of layoffs as job cuts extend into 2023 (Inman)
Apartment Rent Growth Set to Keep Slowing This Year: Apartment vacancies are piling up as a wave of new rental buildings are built, cutting the pace of rent growth across the country. (WSJ)
Here's What 5 Real Estate Pros Say Will Happen in the 2023 Housing Market (Hunker)
Canada has officially banned most foreigners from buying a home, and it all has to do with Canada’s wildly unaffordable housing market. (The Hustle)
VIDEO: Breaking down second home co-ownership with Pacaso’s Austin Allison (The Real Deal)